The documentation does not match the implementation, or the implementation is broken:
The variable latex-run-command was changed from "latex" to "pdflatex", but command tex-file (found in latex-mode-map) still uses latex \\nonstopmode\\input.
I don't think you're seeing the image preview via imagemagick/dvisvgm, I think you might be seeing a unicode overlay maybe?
If it is, according to the manual you should be able to toggle it with C-c C-x \ looking at the variable org-pretty-entities in M-x customize-variables may help you.
AUCTeX fontifies all control words: For known ones (added in font-latex.el or via AUCTeX style files), it uses different classes (e.g., warning, function, textual etc.) and for unknown ones, it simply uses the font-latex-sedate-face which defaults to Foreground: DimGray. You can customize this face if you want a different appearance. There is no ...